08 May 2009
A COMPANY IS DOING BUSINESS THROUGH CONSIGNEE AGENTS AND PAYS RS.1,00,000 P.M. TO EACH AGENT AS "COMMISSION" DURING F.Y.2007-08.
IN JUNE 2008 IT DECIDES TO INCREASE COMMISSION BY RS. 25,000 P.M. WITH RETROSPECTIVE EFFECT FROM NOV. 2007.
NOW WHETHER INCREASED COMMISSION FOR THE PERIOD (NOV 2007- MAR. 2008) WILL BE DISALLOWED AS EXP. U/S 37 OF INCOME TAX ACT 1961 FOR ASS. YEAR 2009-10 OR NOT ?
I THINK THAT IT WON'T BECAUSE AS PER "AS-5" IT IS NOT A "PRIOR PERIOD" ITEM.
CAclubindia
